What Do Economists Call the Situation Where a Hired Manager

question 209

Multiple Choice

What do economists call the situation where a hired manager does not have the same interests as the owners of the business?

• A)conquest and control
• B)a financial problem
• C)a principal-agent problem
• D)a financial intermediary problem

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Definitions:

Cheapest Way

This refers to the method or strategy that incurs the lowest cost to achieve a particular outcome or objective.

Short-Run Total Cost

The total of all costs incurred in the production of goods or services in the short term, including both fixed and variable costs.

Short-Run Average Cost

The total cost of production (fixed and variable costs) divided by the quantity produced, over the short term where some factors of production are fixed.

Output Quantity

The total amount of goods or services produced by a company or an economy in a specific period.